The Incentive Mechanism Research On Professional Managers In China's Family-owned Business

Over the past 30 years, the private enterprises of China have sprung up rapidly, in which more than 90% are family operations. Family business in China has become an important micro-economic foundation and its development has important implications to the sustainable development of China's economy.With the rapid development of family enterprises, the limitations of their owners in knowledge and thinking hamper enterprises becoming bigger and stronger. Therefore, professional managers are begun to introduce from outside, but because of the impact of China's traditional culture, the imperfections of professional managers market and unreasonable incentive mechanism within the family business, these factors result in the introduction of professional managers ending in failure. So this paper further explores on the incentives mechanism of professional managers in China's family business.First, this paper prospects the incentive theory of professional managers in family business and analyzes its deficiencies. And on the basis of this, the concept of the family business, professional managers and incentive mechanism are defined. On the basis of these concepts, the questionnaire was designed and a sample survey was conducted (this research investigated a total of 420 family-owned enterprises, a total of 700 questionnaires were handed out, in which 617 questionnaires were valid. Among them, 230 effective questionnaires focus on family business owners and 387 questionnaires aim at professional managers). According to the survey results, a statistical analysis was conducted to make sense the existing problems of professional managers and incentive mechanism in China's family business.Aimed at the problems in family business, incentive mechanism of professional manager was constructed. That is to adopt EVA-oriented material and spiritual incentive mechanism. On the side of material incentive, we should take the material composition of the annual salary incentive model and that means using contingency theory. Through this theory, the owner of the family enterprises can adjust the weight of all factors according to different specific circumstances and identify a best material incentive mechanism; in the spiritual incentives, it is crucial that pay more attention to the trust incentive, respect incentive and career incentive to professional managers and take the vocational training to managers seriously forming a learning organization.